Low-Income Communities Bonus Credit Program for Energy Investment Credit

Summary

This practice note focuses on the requirements and application process for the Clean Electricity Low-Income Communities Bonus Credit Amount Program under I.R.C. Section 48E(h), the successor to the low-income communities bonus credit program for the energy investment credit under I.R.C. Section 48(e). The bonus credit provides a 10 or 20 percentage point increase to the clean electricity investment credit for applicable facilities with a maximum net output of less than five megawatts (AC). The legacy credit, which was instituted under the Inflation Reduction Act of 2022 (Pub. L. No. 117-169), applied to qualified solar and wind-powered electricity generating facilities for the 2023 and 2024 program years. For facilities placed in service after December 31, 2024, applicants generally apply under I.R.C. Section 48E(h) for an allocation of capacity limitation that will increase the amount of their clean electricity investment credit for the year in which the facility is placed in service.